NAMIC Calls on Senate to Protect Flood Insurance Reforms

Reforms to the National Flood Insurance Program passed into law just last year must be allowed to proceed to begin the process of providing financial stability for the program and to continue ensuring that coverage is available, the National Association of Mutual Insurance Companies said today.

In a letter signed by Jimi Grande, NAMIC’s senior vice president of federal and political affairs, and sent to all members of the Senate, NAMIC urged lawmakers to resist calls to delay necessary reforms that would bring pricing for flood insurance more in-line with the potential for losses covered by the NFIP. These reforms were enacted under the Biggert-Waters Act, which passed with strong bipartisan majorities in both the House and Senate, but some in Congress are now calling for a delay as the phase-in of risk-based rates starts to take effect.

“The NFIP must charge rates that reflect the true cost of providing flood insurance coverage, and the government should not continue to mask the risks of living in a flood-prone area by delaying these much-needed reforms,” Grande said in the letter. “Prior to the passage of Biggert-Waters, the NFIP’s unsustainable rates all but ensured the program would remain in debt to the Treasury and would be incapable of meeting its obligations to policyholders after a major flood.”

In the letter, Grande said NAMIC recognizes the need in some cases for assistance, which could be provided through direct assistance rather than by weakening the NFIP through suppressed flood insurance rates. He also emphasized the need to address natural catastrophes like flooding in a proactive manner, highlighting the need for better mitigation practices by both the public and private sectors.

“NAMIC continues to support providing assistance on a means-tested basis for those who truly cannot afford the increased rates, and we are also actively engaged in efforts to reduce the threat of flooding by promoting and incentivizing pre-disaster mitigation,” Grande said in the letter. “However, we remain in full support of reforms to the NFIP made by the Biggert-Waters Act and oppose any efforts to delay or rollback pieces of the legislation.